Date: 2007
Type: Article

An evolutionary theory of inflation inertia

Journal of the European Economic Association, 2007, 5, 2-3, 433-443  
 
ANAGNOSTOPOULOS, Alexis, LICANDRO, Omar, BOVE, Italo, SCHLAG, Karl H., An evolutionary theory of inflation inertia, Journal of the European Economic Association, 2007, 5, 2-3, 433-443   - https://hdl.handle.net/1814/17424

Retrieved from Cadmus, EUI Research Repository

We provide a simple theory of inflation inertia in a staggered price setting framework à la Calvo (1983). Contrary to Calvo's formulation, the frequency of price changes is allowed to vary according to an evolutionary criterion. Inertia is the direct result of gradual adjustment in this frequency following a permanent change in the rate of money growth.
 
Cadmus permanent link: https://hdl.handle.net/1814/17424
ISSN: 1542-4766
Keyword(s): Monetary economics Inflation rate Monetary models Price theory Inflation inertia

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